InnVest Real Estate Investment Trust ("InnVest") (TSX: INN.UN) announced today the implementation of a strategic plan designed to strengthen InnVest's core operations, improve its balance sheet and increase long-term profitability. In addition, InnVest announced that it expects to qualify as a REIT for its 2012 taxation year based on substantively enacted amendments to Canadian federal income tax legislation.

"We are committed to creating long-term value for our unitholders. Following several months of intense analysis, we have developed a comprehensive strategic plan to position our portfolio for the long term. Our strategic plan positions us to achieve profitable, strategic growth and supports our objective to provide our unitholders with stable distributions," said Anthony Messina, President and Chief Executive Officer.

A copy of InnVest's investor presentation is available on InnVest's website at www.innvestreit.com.

Strategic Plan

InnVest has undertaken a comprehensive review of its portfolio to assess the performance, condition and outlook of each of its hotels. Based on the findings, management has developed a portfolio repositioning program to divest of non-core hotels and implement a focused profit-enhancing capital plan for InnVest's "core" portfolio of hotels which will deliver a stable stream of income. InnVest's strategic plan revolves around the following four initiatives:

Divestiture Program to Reposition Portfolio

Sell 24 properties (3,143 rooms) over the next 2 years for estimated gross sale proceeds of $185 million.

Generate net proceeds after debt repayment and selling costs of approximately $60 million. These sales are expected to be accretive to InnVest.

Improve the overall quality and diversification of the portfolio by divesting of low-yielding non-core hotels where the potential for earnings growth is low, where the long-term capital needs do not support our investment return requirements or where InnVest can capitalize on embedded value.

Implement a Focused Capital Program

Invest approximately $130 million over 2 years to renovate and reposition InnVest's core hotel portfolio.

$45 million for the renovation and repositioning of its Comfort Inn portfolio

Based on the substantive enactment of a Bill containing favourable proposed amendments to the tests for InnVest to qualify as a REIT for Canadian income tax purposes, and InnVest's valuation and measurement of its different categories of assets and revenues as required under these new tests, InnVest believes that it qualified as a REIT for such purposes during 2012. As a result, InnVest expects to reverse its previously accrued current income tax provision and substantially eliminate its deferred tax liability. There can be no assurances that InnVest will continue to qualify as a REIT for Canadian income tax purposes for subsequent taxation years.

Conference Call

Management will host a conference call on Wednesday January 30, 2013 at 8:30 a.m. Eastern time to discuss the details of today's announcement. Investors and analysts are invited to access the call by dialing (416) 340-2217 or 1(866)696-5910 and referencing the participant pass code 8900613. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available January 30th through to February 13, 2013. To access the recording please call (905) 694-9451 or (800)408-3053 and use the reservation number 7738140#.

Trust Profile

InnVest is an unincorporated open-ended real estate investment trust which owns a portfolio of 136 hotels across Canada representing approximately 18,000 guest rooms operated under internationally recognized brands. InnVest also holds a 50% interest in Choice Hotels Canada Inc., one of the largest franchisors of hotels in Canada.

InnVest's units and convertible debentures trade on the Toronto Stock Exchange (the "TSX") under the symbols INN.UN, INN.DB.B, INN.DB.C, INN.DB.D, INN.DB.E and INN.DB.F.

Forward-looking Statements

Statements contained in this press release that are not historical facts are forward-looking statements which involve risk and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are real estate investment risks, hotel industry risks, competition and the status of InnVest as a Qualified REIT for Canadian federal income tax purposes in